Rupee weakens on dollar shortcovering

Ends at 61.50/51 a dollar compared to its close of 61.23/24 on Wednesday

The rupee weakened on Thursday, hurt by dollar shortcovering in later trade, but the currency posted its second straight monthly gain on the back of continued buying of local shares by foreign institutional investors.

The benchmark BSE index rose on Thursday to mark a record closing high as state-run lenders such as State Bank of India rallied on hopes of stabilising asset quality and attractive valuations. Foreign investors bought shares for a 19th consecutive session on Wednesday, taking their total buying to nearly $2.6 billion during that period and to $16.2 billion so far this year. The partially convertible rupee closed at 61.50/51 a dollar compared to its close of 61.23/24 on Wednesday. On the month, the unit gained 1.8 per cent, after having surged five per cent in September.

Bonds turn bearish
Government securities (G-secs) turned bearish on selling pressure from banks and companies. The 7.16 per cent G-sec maturing in 2023 dropped to Rs 90.59 from Rs 90.90 previously, while its yield rose to 8.62 per cent from 8.57 per cent. The 8.28 per cent G-sec maturing in 2027 declined to Rs 95.45 from Rs 95.70.

Call rates end steady
Call money rates ended stable at the overnight market as demand from borrowing banks matched supplies. The rates ended stable at 8.70 per cent.